Financial instrument providing a guaranteed growth rate and a guarantee of lifetime payments

ABSTRACT

A method for providing a financial instrument includes determining an initial account balance associated with a financial instrument based upon an initial deposit amount, wherein the financial instrument includes an account with an account balance that changes over time. The method further includes establishing a first guarantee of a protected value, the protected value including at least an amount based upon the initial account balance growing at a minimum growth rate for a defined period of time or until one or more defined events occur, whichever is sooner; and establishing a second guarantee that a beneficiary may periodically receive a transfer of an amount of money for the life of a designated party, wherein the amount comprises a percentage of the protected value at the time of a particular event, provided that the amount may vary based upon withdrawals from the account in excess of a first particular limit.

RELATED APPLICATION

This application claims the benefit under 35 U.S.C. §119 of U.S.Provisional Application Ser. No. 60/703,630 filed Jul. 29, 2005.

TECHNICAL FIELD OF THE INVENTION

This invention relates generally to financial instruments and moreparticularly to a financial instrument providing a guaranteed growthrate and a guarantee of lifetime payments.

BACKGROUND OF THE INVENTION

There are numerous financial instruments available on the market andpeople invest in them for a variety of reasons. Some investors areinterested in obtaining high rates of return on their investments, whileothers are willing to forego high rates of return in exchange for areduced level of financial risk. Some investors are interested inobtaining a steady income stream for a period of years or possibly forlife. When making decisions regarding the selection of a financialinstrument, there are multiple tradeoffs. Typically, the lower the riskis, the lower the expected rate of return will be. There are alsonumerous tax consequences that may be considered in selecting afinancial instrument.

An annuity is one form of financial instrument. A typical annuity isused to pay a certain sum of money at specified intervals, with thepayment amount being based on a given amount of principal. There aremany different types of annuities. For example, annuities can beimmediate or deferred, fixed or variable, and single payment or multiplepayment.

In a typical immediate annuity, a lump sum of money is exchanged for astream of payments to begin immediately. In a typical deferred annuity,an investment is made with the anticipation that it will grow and astream of payments based upon the value of the account at a future timewill begin at some point in the future. A fixed annuity is one in whichthe rate of return is specified at the time the annuity is purchased. Avariable annuity typically allows the purchaser to select from a groupof potential investments and the rate of return depends upon theperformance of the selected investments.

In some cases, annuities provide additional benefits such as deathbenefits, cash surrender benefits, or joint and survivor income paymentoptions.

SUMMARY OF THE INVENTION

According to one embodiment of the invention, a method for providing afinancial instrument includes determining an initial account balanceassociated with a financial instrument based upon an initial depositamount, wherein the financial instrument includes an account with anaccount balance that changes over time and allows at least part of anaccount balance to be discretionarily withdrawn. The method furtherincludes establishing a first guarantee of a protected value, theprotected value including at least an amount based upon the initialaccount balance growing at a minimum positive growth rate for at least adefined period of time or until one or more defined events occur,whichever is sooner; and establishing a second guarantee that abeneficiary may periodically receive a transfer of an amount of moneyfor the life of a designated party, wherein the amount comprises apercentage of the protected value at the time of a particular event,wherein the percentage of the protected value is fixed upon an effectivedate of the second guarantee, and wherein the transfer may be due towithdrawal from the account or due to benefit payments made to thebeneficiary, provided that the amount may vary based upon withdrawalsfrom the account in excess of a first particular limit. The methodfurther providing that at least one of the above actions is performedusing a computer.

Certain embodiments of the present invention may provide varioustechnical advantages. For example, the invention may allow an accountholder to maintain liquidity in an account while at the same timereceiving a guarantee of lifetime income and a guaranteed growth rate.Certain embodiments may also allow an account holder to receive thepotentially higher rates of return associated with variable annuitieswhile at the same time avoiding the associated risk of loss by obtaininga guaranteed growth rate.

Other technical advantages of the present invention will be readilyapparent to one skilled in the art from the following figures,descriptions, and claims. Moreover, while specific advantages have beenenumerated above, various embodiments may include all, some, or none ofthe enumerated advantages.

BRIEF DESCRIPTION OF THE DRAWINGS

For a more complete understanding of the present invention and itsadvantages, reference is now made to the following description, taken inconjunction with the accompanying drawings, in which:

FIG. 1 illustrates a system for providing a financial instrumentaccording to a particular embodiment of the present invention;

FIG. 2 illustrates a financial instrument according to a particularembodiment;

FIGS. 3A and 3B provide a flowchart illustrating the operation of afinancial instrument according to a particular embodiment;

FIGS. 4A-4C illustrate an example data processing system for providing afinancial instrument according to a particular embodiment; and

FIG. 5 illustrates an embodiment of a general purpose computer.

DETAILED DESCRIPTION OF THE EXAMPLE EMBODIMENTS

It should be understood at the outset that although exampleimplementations of embodiments of the invention are illustrated below,the present invention may be implemented using any number of techniques,whether currently known or not. The present invention should in no waybe limited to the example implementations, drawings, and techniquesillustrated below. Additionally, the drawings are not necessarily drawnto scale.

FIG. 1 illustrates a system 10 for providing financial instrument 100according to a particular embodiment of the present invention. System 10may interact with customer 110 and issuer 120; and system 10 may utilizeaccount 130 and protected value 140. Financial instrument 100 mayrepresent a contract between customer 110 and issuer 120. Financialinstrument 100 may include certain provisions as described below inrelation to FIG. 2.

According to certain embodiments, system 10 may be utilized to providefinancial instrument 100 to customer 110, such that customer 110 maymake a deposit and retain liquidity, while also receiving the benefit ofa guarantee of lifetime payments and the security associated with aguaranteed growth rate.

Customer 110 may broadly refer to one or more of an account holder 112,a beneficiary 114, a designated party 116, and/or one who purchasesfinancial instrument 100 for another person or entity. In certainembodiments, account holder 112 may represent a party who purchasesfinancial instrument 100 and/or who is attributed as being an owner ofaccount 130. In certain embodiments, account holder 112 may have one ormore ownership rights in account 130. For example, account holder 112may have the right to terminate financial instrument 100, to makeinvestment decisions for account 130, to identify one or morebeneficiaries 114, and/or to identify one or more designated parties116, to make deposits into account 130. In a particular embodiment,account holder 112 may be the entity or entities who have tax liabilityfor the transactions related to account 130. In certain embodiments,beneficiary 114 may represent a party who may receive payments and/ormake withdrawals in accordance with the terms of financial instrument100. In certain embodiments, designated party 116 may represent anindividual, group of individuals, and/or other entity that may bedesignated for purposes of determining death benefits, lifetimepayments, fees, guaranteed rates, and/or other features of financialinstrument 100. For example, guaranteed rates and/or fees may bedetermined based upon the age, gender, and/or health of designated party116. As another example, death benefit provisions may be based upon thedeath of designated party 116.

In certain embodiments, one or more of account holder 112, beneficiary114, and designated party 116 may be the same party. In certainembodiments, financial instrument 100 may be purchased by account holder112 for the benefit of beneficiary 114, with designated party 116 beingthe designated life for the guarantee of lifetime payments.

In certain embodiments, one or more of account holder 112, beneficiary114, and designated party 116 may be related. For example, designatedparty 116 and beneficiary 114 may be related as husband and wife. Asanother example, account holder 112 may be an employer and an employeemay be both beneficiary 114 and designated party 116. Alternatively,account holder 112 and beneficiary 114 may be the same individual orentity. In some embodiments, an employer might purchase account 130 foraccount holder 112. Also, financial instrument 100 may have multipleaccount holders 112, beneficiaries 114, and/or designated parties 116.For example, a husband and a wife may both be beneficiaries 114 anddesignated parties 116. As another example, two or more businesspartners could be designated parties 116. While this patent describesvarious actions, benefits, steps, etc. in relation to a customer 110,account holder 112, beneficiary 114, and/or designated party 116, thosedescriptions should not be construed as limiting because financialinstrument 100 might provide for various persons to exercise control,take various actions, receive certain benefits, and/or affect certainfeatures with regard to financial instrument 100.

Issuer 120 may represent an entity that provides and/or sells financialinstrument 100 to customer 110. Issuer 120 may represent a bank, aninsurance company, or other business entity engaged in the sale of oneor more financial instruments. Issuer 120 may also represent multipleentities that operate together to provide or sell financial instrument100.

Account 130 may represent a principal balance including amountsdeposited by customer 110 together with accrued growth due to a returnon one or more investments. The value of account 130 may be distributedamong one or more investments 132. Investment 132 may provide a fixed orvariable return, and the value of account 130 may be distributed amongany combination of investments 132. For example, investment 132 mayrepresent a municipal bond, a bond fund, a money market account, acorporate security, an index fund, a mutual fund, a real estateinvestment trust, or any other appropriate type of investment. Incertain embodiments, account 130 may include one or more investments 132associated with multiple financial entities. In certain embodiments, thevalue of account 130 may be withdrawn in whole or in part at thediscretion of customer 110. In various embodiments, issuer 120 mayrestrict the kinds of investments 132 available to customer 110 or allowcustomer 110 to accept certain limitations in exchange for otherbenefits. Account 130 may or may not be associated with issuer 120. Insome embodiments, a third party administering account 130 may contractwith issuer 120 to provide the guarantees. An insurance company, forexample, might provide the guarantees for mutual fund accountsadministered by a third party or for other types of financial accounts.

Protected value 140 represents a value all or a portion of which issuer120 guarantees that beneficiary 114 will be able to receive. Protectedvalue 140 may be based upon the value of account 130 at some point intime. In some embodiments, although account 130 may decrease due tomarket fluctuations, protected value 140 does not, thus providing aguaranteed rate of return regardless of market performance. In certainembodiments, protected value 140 may be based upon an initial depositand the initial deposit may include an account balance from an existingcontract. Thus, in some embodiments, the guarantees described herein maybe added to existing financial instruments after the passage of time.

In certain embodiments, the amount and/or the guaranteed percentage ofprotected value 140 may vary based on certain characteristics ofcustomer 110. For example, the guaranteed percentage of protected value140 (or the protected value 140 itself) may vary based upon the gender,age, or health status of one or more of account holder 112, beneficiary114, and designated party 116. In certain embodiments, the amount and/orthe guaranteed percentage of protected value 140 may vary depending uponwhether and to what extent customer 110 accepts certain limitations onflexibility and/or control over account 130 and/or distributionstherefrom. The amount available for withdrawal may also vary similarly.

In certain embodiments, protected value 140 may be calculated at thetime that financial instrument 100 is purchased, and in otherembodiments protected value 140 may be calculated at the end of acertain period of time or upon the happening of a triggering event. Insome embodiments, protected value 140 may be based upon a combination offactors and calculated at different times. Depending upon theembodiment, protected value 140 may become fixed at some point in time.For example, protected value 140 may become fixed at the time of thefirst discretionary withdrawal from account 130 by customer 110.

Numerous methods may be used to fix protected value 140 at some point intime. For example, protected value 140 may be calculated as equal to thevalue of account 130 at the time of the first withdrawal by customer110. Alternatively, protected value 140 may be calculated as the highestvalue of account 130 at one or more specified times or at any time. Forexample, protected value 140 may be calculated as the highest value ofaccount 130 on each of the first ten anniversaries of the purchase date.In certain embodiments, protected value may be calculated as the greaterof multiple calculation methods. For example, protected value may becalculated as the value of account 130 on the date of first withdrawalor the highest value of account 130 on the first ten anniversary dates,but in no event less than the initial value of account 130 growing at afive percent growth rate for the first ten years. In certainembodiments, protected value 140 may be calculated based upon the valueof account 130 prior to the inclusion of any bonuses. Alternatively, incertain embodiments, protected value 140 may be calculated based uponthe value of account value 130 with additional bonuses (or otherincentives) added. For example, issuer 120 may pay a bonus to enticecustomers to purchase the guarantees discussed herein. The invention mayinclude any method of determining protected value 140.

In certain embodiments, the amount and/or the guaranteed percentage ofprotected value 140 may change after it has been initially determined.As one example, the amount and/or guaranteed percentage of protectedvalue 140 may change based upon changes in the law. As another example,the amount and/or guaranteed percentage of protected value 140 maychange based upon an inflationary index, interest rate, or exchangerate. As yet another example, the amount and/or guaranteed percentage ofprotected value 140 may change based upon changes in the health ofcustomer 110.

In certain embodiments, customer 110 may be allowed to step-up protectedvalue 140 at specified times or at any time. For example, following anelection to step-up protected value 140, protected value 140 may be setas equal to the current value of account 130. In a particularembodiment, customer 110 may elect to step-up protected value 140 at anytime after the fifth anniversary of the first withdrawal, withadditional step-ups being available five years after the date of theprevious step-up election. A step-up in protected value 140 may requirefurther deposits to account 130.

In certain embodiments, certain provisions of financial instrument 100may be managed through the use of annual income amount 142 and/or annualwithdrawal amount 144. For example, a guarantee of lifetime payments maybe managed by calculating annual income amount 142 and evaluatingdiscretionary withdrawals in relation to annual income amount 142. Forexample if the cumulative withdrawals for a certain year exceed annualincome amount 142, then annual income amount 142 may be reducedaccordingly for future years. Similarly, one or more guarantees may bemanaged by calculating annual withdrawal amount 144 and evaluatingdiscretionary withdrawals in relation to annual withdrawal amount 144.Further explanation of the operation of a certain embodiment withrespect to protected value 140, annual income amount 142, and annualwithdrawal amount 144 is included below in relation to FIGS. 3A and 3B.

In the operation of certain embodiments, customer 110 may purchasefinancial instrument 100 from issuer 120 (or an agent thereof). In somecases, the purchase may occur electronically. Issuer 120 may then createaccount 130 and associate one or more deposits made by customer 110 withaccount 130. In certain embodiments, customer 110 may make investmentchoices regarding the allocation of funds associated with account 130.Protected value 140 may be calculated using one or more specifiedcalculation methods.

In some embodiments, following the purchase of financial instrument 100,customer 110 may make additional deposits to and/or discretionarywithdrawals from account 130. Withdrawals from account 130 may or maynot be required or allowed based upon the terms of financial instrument100. The timing of withdrawals may or may not be regulated by financialinstrument 100. In certain embodiments, withdrawals can be taken asseparate partial withdrawals or as systematic withdrawals. For example,withdrawals may be automated and may be set up on a periodic basis, withthe period being yearly, quarterly, monthly, etc.

Although financial instrument 100 has been described as being purchaseddirectly from issuer 120 in certain embodiments, financial instrument100 may be purchased through one or more intermediaries.

FIG. 2 illustrates a particular embodiment of financial instrument 100.In the embodiment shown, financial instrument 100 includes annuitycontract 102, lifetime payment guarantee 104, growth rate guarantee 106,and death benefit 108. Annuity contract 102 may represent a contract fora broad range of annuity products. For example, annuity contract 102 mayrepresent a deferred variable annuity such as ANNUITY ONE 3 issued byPRUCO LIFE INSURANCE COMPANY. In certain embodiments, annuity contract102 may represent a contract between customer 110 and issuer 120,wherein customer 110 may make deposits and/or withdrawals during anaccrual phase and then issuer 120 may make payments during adistribution phase. The transition from the accrual phase to thedistribution phase may occur following an election by customer 110 toannuitize account 130.

In addition to the basic terms of annuity contract 102, financialinstrument 100 may include additional provisions including lifetimepayment guarantee 104, growth rate guarantee 106, and death benefit 108.Although annuity contract 102, lifetime payment guarantee 104, growthrate guarantee 106, and death benefit 108 are shown as separateelements, one or more of these elements may be combined, and each ofthese elements may also include numerous components. In certainembodiments, different elements of financial instrument 100 may bepurchased or elected at different times. For example, annuity contract102 may be purchased in year one, and lifetime payment guarantee 104 andgrowth rate guarantee 106 may be purchased or elected in year one or atanytime thereafter. In some embodiments, account 130 remains liquid andmay be withdrawn (in some cases with penalty) by customer 110 prior toannuitization of annuity contract 102. Annuitization may or may not evenoccur upon the desires of customer 110.

In certain embodiments, lifetime payment guarantee 104 may includeprovisions guaranteeing that beneficiary 114 may receive financialtransfers for life, beginning at or after a specified triggering event.For example, in certain embodiments, these financial transfers may bedue to discretionary withdrawals and/or payments. In certainembodiments, the amount of (and/or a limit for) these financialtransfers may be fixed or variable. For example, the amount of (and/or alimit for) these financial transfers may be determined based upon theage, gender, health status, and/or other morbidity factors for one ormore individuals. As another example, the amount of (and/or a limit for)these financial transfers may be independent of such factors. In certainembodiments, the amount of (and/or the limit for) these financialtransfers may change after a period of time according to a set schedule,changes in an external index, and/or any appropriate factor.

In certain embodiments, the amount of (and/or a limit for) thesefinancial transfers may be determined based upon specified percentagesof protected value 140. For example, the amount of (and/or a limit for)these financial transfers may be set at a first percentage for a certainperiod and then change to second percentage for another period. Incertain embodiments, these percentages may be fixed upon the effectivedate of lifetime payment guarantee 104, upon the date of a firstfinancial transfer, or upon any other appropriate date.

In certain embodiments, lifetime payment guarantee 104 may guaranteethat beneficiary 114 will receive no less than annual income amount 142each year for the life of designated party 116, beginning with an event.In certain embodiments, annual income amount 142 may be five percent ofprotected value 140, but any percentage of any measured amount could beused. In certain embodiments, protected value 140 may be adjustedupwards or downwards based on certain events. For example, protectedvalue 140 may be increased by additional deposits and may be decreasedby cumulative withdrawals in a single year that exceed annual incomeamount 142.

In certain embodiments, growth rate guarantee 106 may include provisionsallowing customer 110 to make withdrawals from account 130 based upondeposits made by customer 110. The provisions may further provide thatthe withdrawals may be made from a value that is guaranteed to grow at aspecified fixed or variable rate for a specified period of time. Forexample, growth rate guarantee 106 may allow beneficiary 114 to makewithdrawals from protected value 140, with protected value 140guaranteed to be no less than the value of customer deposits growing ata fixed five percent per year for ten years from the date of the firstdeposit or until the date of the first withdrawal, whichever is sooner.

In certain embodiments, the specified rate for growth rate guarantee 106may be any positive fixed value. In certain embodiments, the specifiedrate for growth rate guarantee 106 may be zero or a fixed negativevalue. In embodiments where the specified rate is zero or a fixednegative value, the beneficial aspects of growth rate guarantee 106 mayinclude a reduction in risk for customer 110. In certain embodiments,the specified rate may be based on one or more variable indices. Forexample, the specified rate may be based on the Consumer Price Index, astock market index, and/or the Federal Reserve's discount rate.

In certain embodiments, the specified rate may vary depending on thetiming of deposits, the size of deposits, and/or the value ofinvestments 132. For example, different rates may apply to differentdeposits or the overall rate may be calculated based on the rates ineffect at the time that deposits are made, weighted based on therelative size (or actual size) of the deposits. In certain embodiments,the specified rate may vary based on characteristics of account holder112, beneficiary 114, and/or designated party 116. For example, thespecified rate may vary depending on the gender, age, or health statusof designated party 116.

In certain embodiments, the guaranteed growth may be set at a first ratefor a specified period of time, or until a specified event occurs, andthen change to a second rate. For example, the guaranteed growth ratemay be zero for the first two years and then may change to a fixed fivepercent growth rate for the next eight years. In certain embodiments,the growth rate may change numerous times, with the changes occurringbased upon specified periods of time and/or upon the occurrence ofspecified events.

In embodiments of financial instrument 100 including death benefit 108,death benefit 108 may include provisions allowing for payments to bemade to a recipient designated by account holder 112 and/or beneficiary114, upon the death of designated party 116. For example, payments madeunder death benefit 108 may be made to beneficiary 114 upon the death ofdesignated party 116, where designated party 116 is account holder 112.As another example, payments made under death benefit 108 may be made toan identified third party beneficiary upon the death of designated party116 or beneficiary 114. Death benefit 108 may provide for payment of anamount based upon the value of account 130, protected value 140, or someother value identified in death benefit 108. For example, death benefit108 may provide for payment in the amount of the value of account 130 atthe time of death. As another example, death benefit 108 may provide forpayment in the amount of the highest value of account 130 on anyanniversary of the effective date of financial instrument 100. Incertain embodiments, death benefit 108 may provide for payment in theamount of the highest of multiple calculation methods. Although deathbenefit 108 has been illustrated and described as a separate element offinancial instrument 100, death benefit 108 may be formed from multiplecomponents and/or may be included as part of another element offinancial instrument 100.

In embodiments of financial instrument 100 including annuity contract102, lifetime payment guarantee 104, and growth rate guarantee 106,annuitization may occur due to an election to annuitize or the terms ofannuity contract 102 may require annuitization on or before a certaindate or triggering event. In certain embodiments, upon annuitization,customer 110 may be provided with multiple annuitization options. Forexample, customer 110 may be provided with periodic payments for life,with the amount of the payments based in part upon the value of account130 at the time of annuitization. As another example, customer 110 maybe provided with periodic payments for an established period, with theamount of the payments based in part upon the value of account 130.Alternatively, customer 110 may be provided with periodic payments forlife in an amount equivalent to annual income amount 142 or customer 110may be provided with periodic payments in an amount equivalent to theannual withdrawal amount 144 for a period of time extending untilprotected value 140 is exhausted. In certain embodiments, uponannuitization, the benefits associated with lifetime payment guarantee104 and growth rate guarantee 106 may be terminated.

In certain embodiments, financial instrument 100 may provide for anoption allowing customer 110 to elect to receive the present value offuture guaranteed payments. For example, in embodiments where the chargefor lifetime payment guarantee 104 is an up-front charge, financialinstrument 100 may allow for customer 110 to cancel lifetime paymentguarantee 104 and receive a payment calculated based upon the presentvalue of the guarantee. In these embodiments, the calculation may or maynot include an underwriting assessment of the life expectancy ofbeneficiary 114.

Although, in the embodiment shown, financial instrument 100 includesannuity contract 102, in other embodiments financial instrument 100 mayinclude any other appropriate forms of investment contracts. Forexample, financial instrument 100 may include a mutual fund contract, a401(k) contract, and/or an individual retirement account contract inaddition to, or in lieu of, annuity contract 102.

The costs associated with each element of financial instrument 100 maybe assessed together or as separate charges, and the charges may beassessed in different ways. For example, the costs may be assessed asup-front charges, as asset charges, or as charges against withdrawals orpayments. In certain embodiments, the costs may be charged periodicallyand/or may vary over time. For example, there may be no charge for aperiod of time and/or the charge may increase or decrease over timedepending on a variety of factors. In certain embodiments, the costs maybe charged in a manner such that the charge is assessed pro-rata overmultiple investments or accounts 130, according to an election bycustomer 110, and/or such that the tax consequences of the charge aresubstantially minimized. In a particular embodiment, the charge for eachelement is assessed as a daily asset charge against the value of account130. For example, the charge assessed for lifetime payment guarantee 104and growth rate guarantee 106 may be a sixty basis point charge (0.60percent per year) assessed against the daily balance of account 130.Similarly, the charge assessed for death benefit 108 may be a 140 basispoint charge (1.40 percent per year) assessed against the daily balanceof account 130.

As indicated above, in certain embodiments, financial instrument 100 mayprovide for multiple beneficiaries 114 and financial instrument 100 mayprovide for various persons to exercise control. For example, financialinstrument 100 may provide that both a husband and a wife arebeneficiaries 114 and designated parties 116. Financial instrument 100may further provide that the husband may make discretionary withdrawalsfrom account 130 and, if the husband pre-deceases the wife, that thewife may make discretionary withdrawals from account 130 after thehusband's death. Additionally, financial instrument 100 may furtherprovide that if account value 130 reaches zero during the husband'slife, then the husband may receive periodic payments for life and then,upon his death, the wife may receive periodic payments for her life. Incertain embodiments, financial instrument 100 may include similarprovisions for business partners or other arrangements involvingmultiple beneficiaries 114 and/or designated parties 116.

FIGS. 3A and 3B provide flowchart 200 which illustrates the operation offinancial instrument 100 according to a particular embodiment. Flowchart200 traces a few of the possible scenarios that are available tocustomer 110 following the purchase of financial instrument 100.Flowchart 200 is intended to demonstrate an embodiment of financialinstrument 100 in which certain features of financial instrument 100 arepaid for on a daily basis through the use of a daily fee assessment,assessed on a daily basis against the value of account 130. Accordingly,although in certain embodiments more than one of the elected actionsidentified in flowchart 200 may be taken on the same day, flowchart 200assumes that only one elected action will be taken for any given day.

According to flowchart 200, at step 201, customer 110 may make one ormore initial deposits and purchase financial instrument 100, includinglifetime payment guarantee 104 and growth rate guarantee 106. At step202, account 130 is created. Customer 110 may designate investmentallocations for account 130, one or more beneficiaries 114, and/or oneor more designated parties 116, at step 203. If additional deposits aremade by customer 110, at step 204, then the value of account 130 isincreased by the amount of the additional deposits, at step 212. In somecases, a fee may be deducted from the additional deposits. If an electedwithdrawal is taken at step 206, then the value of account 130 isdecreased by the amount of the withdrawal and the cumulative yearlywithdrawal is calculated at step 208. If the withdrawal is the firstwithdrawal taken in relation to financial instrument 100, at step 210,then protected value 140, annual income amount 142, and annualwithdrawal amount 144 are calculated at step 220. Similarly, ifadditional deposits are made by customer 110 at step 204 and the firstwithdrawal has already been taken at step 214, then protected withdrawal140, annual income amount 142, and annual withdrawal amount 144 arecalculated at step 220. In some embodiments, the additional deposits maynot change some or all of these values. If the withdrawal is not thefirst withdrawal taken in relation to financial instrument 100, at step210, then protected value 140 is decreased by the amount of thewithdrawal at step 216. If the cumulative yearly withdrawal exceedsannual income amount 142, at step 218, then protected value 140 andannual income amount 142 are recalculated at step 222. If the cumulativeyearly withdrawal exceeds annual withdrawal amount 144, at step 224,then protected value 140 and annual withdrawal amount 144 arerecalculated at step 226. These and other calculations are discussed inmore detail below.

If the value of account 130 is equal to zero, at step 230, then theremay be multiple possible alternative outcomes. If the value of account130 is equal to zero at step 230 and cumulative yearly withdrawals areless than or equal to annual income amount 142 at step 231, thenlifetime benefit payments may be made to customer 110 in an amountequivalent to annual income amount 142, at step 232. If the value ofaccount 130 is equal to zero at step 230 and cumulative yearlywithdrawals are greater than annual income amount 142 but less than orequal to annual withdrawal amount 144 at step 233, then beneficiary 114may have withdrawals in an amount equivalent to annual withdrawal amount144 until protected value 140 equals zero, at step 234. If the value ofaccount 130 is equal to zero at step 230 and cumulative yearlywithdrawals are greater than annual withdrawal amount 144, thenfinancial instrument 100 may be terminated in accordance with theprovisions of financial instrument 100, at step 236.

If financial instrument 100 includes annuity contract 102 and customer110 elects to annuitize, at step 240, then account 130 is annuitized andannuity payments are made pursuant to the provisions of annuity contract102, at step 242. Account 130 may cease to exist at this point and itsbalance may no longer be able to be withdrawn by customer 110. Iffinancial instrument 100 includes death benefit 108 and if customer 110dies, at step 250, then payments are made pursuant to the provisions ofdeath benefit 108, at step 252. If customer 110 elects to terminate oneor more provisions of financial instrument 100, at step 260, then thoseprovisions are terminated in accordance with the terms of financialinstrument 100, at step 262.

If a step-up for protected value 140 is available at step 270 and ifcustomer 110 elects a step-up for protected value 140 at step 272, thenprotected value 140 is set as equal to the current value of account 130and annual income amount 142 and annual withdrawal amount 144 areupdated, at step 274. In some embodiments, step 272 may be omitted andthe step up may be automatic. Account 130 may be updated to reflectdaily changes in investments 132 and daily fees may be assessed againstaccount 130, at step 280.

The calculations identified in flowchart 200 are dependent upon theparticular features of financial instrument 100. Included below areexample calculations for particular embodiments of financial instrument100. In the example calculations described below, financial instrument100 is treated as including annuity contract 102, lifetime paymentguarantee 104, and growth rate guarantee 106. For the purpose of thesecalculations, annuity contract 102 is treated as a deferred variableannuity, growth rate guarantee 106 is treated as a guarantee of a fivepercent growth rate for the first ten years, and lifetime paymentguarantee 104 is treated as a guarantee of five percent payments forlife. Unless otherwise indicated, it will be assumed that financialinstrument 100 was purchased with an initial deposit and no additionaldeposits have been made. Also, unless indicated otherwise, all interestis assumed to be compounded daily.

Each time that a withdrawal is made, the value of account 130 may bereduced by the amount of the withdrawal. In one embodiment, on the dateof the first withdrawal, protected value 140 may be set at the greaterof the current value of account 130 or the initial value of account 130growing at five percent per year compounded. Using these assumptions, onthe date of the first withdrawal, annual income amount 142 may set atfive percent of protected value 140 at the time that protected value 140is initially determined. Similarly, annual withdrawal amount 144 may beset at seven percent of protected value 140 at the time that protectedvalue 140 is initially determined. In particular embodiments, thepercentages and/or methods of determining annual withdrawal amount 144or annual income amount 142 may vary.

For example, suppose an initial deposit of $100,000 is made on Apr. 1,2005. The first withdrawal takes place on Feb. 1, 2006 when the value ofaccount 130 is equal to $102,500. Protected value 140 would initially becalculated as the greater of $102,500 or $104,175.16.$100,000×(1.05)(306/365)=$104,175Thus, protected value 140 would be $104,175. After the initial protectedvalue 140 is calculated, the withdrawal amount may be subtracted fromaccount 130 and protected value 140. Accordingly, based on theassumptions above, annual income amount 142 would initially be$5,208.75.$104,175×0.05=$5,208.75Similarly, annual withdrawal amount 144 would initially be $7,292.25.$104,175×0.07=$7,292.25If the cumulative withdrawals in a given year exceed annual incomeamount 142, protected value 140 and annual income amount 142 arerecalculated. Suppose that the current value of account 130 is $55,000and annual income amount 142 is $5,000. The first withdrawal during theapplicable year is $7,000, which is $2,000 greater than annual incomeamount 142. The first step in the calculation would be to subtractannual income amount 142 from the current value of account 130. Thus,the value of account 130 would be reduced to $50,000.($55,000−$5,000=$50,000) The next step is to calculate the new annualincome amount 142. Annual income amount 142 would decrease according tothe percentage of the excess amount to the value of account 130 prior tothe excess being deducted. Thus, annual income amount 142 would drop to$4,800 for subsequent years.(1−($2,000/$50,000))×$5,000=$4,800The excess withdrawal amount would then be subtracted from the value ofaccount 130. Thus, after the withdrawal, the value of account 130 wouldbe $48,000. Protected value 140 would similarly be reduced by the amountof the $7,000 withdrawal.

If the cumulative withdrawals in a given year exceed annual withdrawalamount 144, protected value 140 and annual withdrawal amount 144 arerecalculated. Suppose that the current value of account 130 is $58,000and annual withdrawal amount 144 is $8,000. The first withdrawal duringthe applicable year is $12,000, which is $4,000 greater than annualwithdrawal amount 144. The first step in the calculation would be tosubtract annual withdrawal amount 144 from the current value of account130. Thus, the value of account 130 would be reduced to $50,000.($58,000−$8,000=$50,000) The next step is to calculate the new annualwithdrawal amount 144. Annual withdrawal amount 144 would decreaseaccording to the percentage of the excess amount to the value of account130 prior to the excess being deducted. Thus, annual withdrawal amount144 would drop to $7,360 for subsequent years.(1−($4,000/$50,000))×$8,000=$7,360The excess withdrawal amount would then be subtracted from the value ofaccount 130. Thus, after the withdrawal, the value of account 130 wouldbe $46,000. Protected value 140 would similarly be reduced by the amountof the $12,000 withdrawal.

In certain embodiments, withdrawals that reduce the value of account 130below a specified minimum amount will not be allowed if they are greaterthan the annual income amount. In certain embodiments, provisions infinancial instrument 100 may allow for exceptions to accommodate certainprovisions of the tax code. For example, if financial instrument 100 issubject to required minimum distributions under the tax code, thenfinancial instrument 100 may provide that required withdrawals will notreduce annual income amount 142.

Each time that an additional deposit is made, the value of account 130may be increased by the amount of the deposit. If a withdrawal has beenmade prior to the additional deposit, then protected value 140 may alsobe increased by the amount of the additional deposit, annual incomeamount 142 may be increased by five percent of the additional deposit,and annual withdrawal amount 144 may be increased by seven percent ofthe additional deposit. For example, suppose protected value 140 is$50,000, annual withdrawal amount 144 is $7,000, and annual incomeamount is $5,000. If customer 110 makes an additional deposit of$42,400, then protected value 140 would increase to $92,400.($50,000+$42,400=$92,400). Annual withdrawal amount 144 would increaseto $9,968.($42,400×0.07)+$7,000=$9,968Annual income amount 142 would increase to $7,120.($42,400×0.05)+$5,000=$7,120Again, the percentages may vary and the ability to make deposits may becontrolled. Some contracts may have annual withdrawal amount 144 only orannual income amount 142 only.

If financial instrument 100 provides for step-ups to protected value140, during periods when step-ups are allowed customer 110 may elect tostep-up protected value 140 to equal the value of account 130 (or someproportional amount). In some cases, the step-up may be automatic. Ifsuch a step-up is elected, annual income amount 142 may be set at thegreater of its current value or five percent of the new protected value140. Similarly, if such a step-up is elected, annual withdrawal amount144 may be set at the greater of its current value or seven percent ofthe new protected value 140. For example, suppose the value of account130 is $80,000, protected value 140 is $60,000, annual withdrawal amount144 is $7,000, and annual income amount 142 is $3,500. If a step-up iselected, protected value 140 would be set at $80,000, and annual incomeamount 142 would be set at $4,000. ($80,000×0.05=$4,000). Annualwithdrawal amount 144 would remain the same, because seven percent ofprotected value 140 ($80,000×0.07=$5,600) is less than annual withdrawalamount 144 ($7,000).

FIGS. 4A-4C illustrate an example data processing system 300 forproviding financial instrument 100 according to a particular embodiment.While in certain embodiments financial instrument 100 is entered intowithout using a computer, other embodiments may have a computerizedoption for entering into an agreement. Data processing system 300represents hardware and controlling logic for providing financialinstrument 100. In the embodiment shown, data processing system 300 mayinclude processing module 302, memory 304, and interface 306. As shown,data processing system 300 may be included as a system controlled byissuer 120. However, in other embodiments data processing system 300 maybe external to issuer 120. Additionally, although data processing system300 is shown as a single system, data processing system 300 may bedistributed across multiple platforms housed in multiple locations, someor all of which may or may not be controlled by issuer 120.

Processing module 302 may control the operation and administration ofelements within data processing system 300 by processing informationreceived from interface 306 and memory 304. Processing module 302 mayinclude any hardware and/or controlling logic elements operable tocontrol and process information. For example, processing module 302 maybe a computer, programmable logic device, a microcontroller, and/or anyother suitable device or group of devices.

Memory 304 may store, either permanently or temporarily, data and otherinformation for processing by processing module 302 and communicationusing interface 306. Memory 304 may include any one or a combination ofvolatile or nonvolatile local or remote devices suitable for storinginformation. For example, memory 304 may include random access memory(RAM), read only memory (ROM), magnetic storage devices, optical storagedevices, or any other suitable information storage device or combinationof these devices. Memory 304 may store, among other things, order data320 and account data 330.

Interface 306 communicates information to and receives information fromdevices or systems coupled to data processing system 300. For example,interface 306 may communicate with other elements controlled by issuer120, network 340, and/or elements coupled to network 340. Thus interface306 may include any hardware and/or controlling logic used tocommunicate information to and from elements coupled to data processingsystem 300.

Network 340 represents communication equipment, including hardware andany appropriate controlling logic, for interconnecting elements coupledto network 340. Thus network 340 may represent a local area network(LAN), a metropolitan area network (MAN), a wide area network (WAN),and/or any other appropriate form of network. Furthermore, elementswithin network 340 may utilize circuit-switched, packet-basedcommunication protocols and/or other communication protocols to providefor network communications. The elements within network 340 may beconnected together via a plurality of fiber-optic cables, coaxialcables, twisted-pair lines, and/or other physical media for transferringcommunications signals. The elements within network 340 may also beconnected together through wireless transmissions, including infraredtransmissions, 802.11 protocol transmissions, laser line-of-sighttransmissions, or any other wireless transmission method.

In operation, order data 320 may be transmitted from purchaser 310 todata processing system 300 through network 340. Data processing systemmay process order data 320, generate account data 330, and transmitaccount data 330 to purchaser 310 through network 340. Purchaser 310 mayrepresent one or more customers 110 or purchaser 310 may represent oneor more intermediaries acting on behalf of customers 110.

Order data 320 may include the name of account holder 112, one or moretax identifiers, the resident state of account holder 112, an initialinvestment allocation designation, and a designation of beneficiary 114and/or designated party 116. Account data 330 may include an accountnumber and a document, or reference to a document, containing theprovisions of financial instrument 100.

Upon receipt of order data 320, data processing system 300 may calculateany applicable fees associated with the provisions of financialinstrument 100. Data processing system may also identify account 130 andidentify assets and fees associated with account 130.

In certain embodiments, purchaser 310 may initiate the transmission oforder data 320 through the use of a web-based application. For example,purchaser 310 may access one or more websites and may submit certainportions of order data using those websites. Similarly, purchaser 310may utilize one or more electronic fund transfer (EFT) technologies topurchase financial instrument 100. The use of internet technologies topurchase financial instrument 100 may involve the use of one or moresecurity provisions such as digital signatures, digital certificates,passwords, and encryptions. In certain embodiments, the collection oforder data 320 may occur through the use of an interactive process. Forexample, a web-based application may present a series of questions topurchaser 310, which purchaser 310 may respond to and, in responding,submit the contents of order data 320.

FIG. 5 is an embodiment of a general purpose computer 400 that may beused in connection with one or more pieces of software used to implementthe invention. General purpose computer 400 may generally be adapted toexecute any of the well-known OS2, UNIX, Mac-OS, Linux, and WindowsOperating Systems or other operating systems. The general purposecomputer 400 in this embodiment comprises a processor 402, a randomaccess memory (RAM) 404, a read only memory (ROM) 406, a mouse 408, akeyboard 410 and input/output devices such as a printer 414, disk drives412, a display 416 and a communications link 418. In other embodiments,the general purpose computer 400 may include more, less, or othercomponent parts. Embodiments of the present invention may includeprograms that may be stored in the RAM 404, the ROM 406 or the diskdrives 412 and may be executed by the processor 402. The communicationslink 418 may be connected to a computer network or a variety of othercommunicative platforms including, but not limited to, a public orprivate data network; a local area network (LAN); a metropolitan areanetwork (MAN); a wide area network (WAN); a wireline or wirelessnetwork; a local, regional, or global communication network; an opticalnetwork; a satellite network; an enterprise intranet; other suitablecommunication links; or any combination of the preceding. Disk drives412 may include a variety of types of storage media such as, forexample, floppy disk drives, hard disk drives, CD ROM drives, DVD ROMdrives, magnetic tape drives or other suitable storage media.

Although FIG. 5 provides one embodiment of a computer that may be usedwith the invention, the invention may additionally utilize computersother than general purpose computers as well as general purposecomputers without conventional operating systems. Additionally,embodiments of the invention may also employ multiple general purposecomputers 400 or other computers networked together in a computernetwork. Most commonly, multiple general purpose computers 400 or othercomputers may be networked through the Internet and/or in a clientserver network. Embodiments of the invention may also be used with acombination of separate computer networks each linked together by aprivate or a public network.

Several embodiments of the invention may include logic contained withina medium. In the embodiment of FIG. 5, the logic comprises computersoftware executable on the general purpose computer 400. The medium mayinclude the RAM 404, the ROM 406 or the disk drives 412. In otherembodiments, the logic may be contained within hardware configuration ora combination of software and hardware configurations. The logic mayalso be embedded within any other suitable medium without departing fromthe scope of the invention.

Although the present invention has been described in severalembodiments, a plenitude of changes and modifications may be suggestedto one skilled in the art, and it is intended that the present inventionencompass such changes and modifications as fall within the presentappended claims.

To aid the Patent Office, and any readers of any patent issued on thisapplication in interpreting the claims appended hereto, applicants wishto note that they do not intend any of the appended claims to invoke ¶6of 35 U.S.C. §112 as this paragraph and section exists on the date offiling hereof unless “means for” or “step for” are used in theparticular claim.

1. A financial instrument management system, comprising: software storedon a computer-readable medium and operable to calculate a fee for afinancial instrument, the financial instrument comprising: an accountwith an account balance that changes over time, wherein at least part ofthe account balance may be discretionarily withdrawn and wherein theinitial account balance is based upon an initial deposit amount; a firstguarantee of a protected value, the protected value comprising at leastan amount based upon the initial account balance growing at a minimumpositive growth rate for at least a defined period of time or until oneor more defined events occur, whichever is sooner; and a secondguarantee that a beneficiary may periodically receive a transfer of anamount of money for the life of a designated party, wherein the amountcomprises a percentage of the protected value at the time of aparticular event, wherein the percentage of the protected value is fixedupon an effective date of the second guarantee, and wherein the transfermay be due to withdrawal from the account or due to benefit paymentsmade to the beneficiary, provided that the amount may vary based uponwithdrawals from the account in excess of a first particular limit. 2.The system of claim 1, wherein the beneficiary comprises the designatedparty.
 3. The system of claim 1, wherein the initial account balance isequal to the initial deposit amount.
 4. The system of claim 1, whereinthe minimum positive growth rate is a fixed rate between four percentand six percent.
 5. The system of claim 1, wherein the minimum positivegrowth rate is a variable rate.
 6. The system of claim 5, wherein theminimum positive growth rate is based on a consumer price index.
 7. Thesystem of claim 1, wherein the protected value further comprises atleast any positive value calculated by subtracting the amount based uponthe initial account balance growing at a minimum positive growth ratefrom the account balance, at the end of the period of time or at thetime of the one or more defined events.
 8. The system of claim 1,wherein the initial deposit is based on an account balance from anexisting contract.
 9. The system of claim 1, wherein the percentage ofthe protected value is independent of the designated party's age. 10.The system of claim 1, wherein the percentage of the protected value isindependent of the designated party's age and gender.
 11. A method forproviding a financial instrument, the method comprising: determining aninitial account balance associated with a financial instrument basedupon an initial deposit amount, wherein the financial instrumentcomprises an account with an account balance that changes over time andallows at least part of the account balance to be discretionarilywithdrawn; establishing a first guarantee of a protected value, theprotected value comprising at least an amount based upon the initialaccount balance growing at a minimum positive growth rate for at least adefined period of time or until one or more defined events occur,whichever is sooner; establishing a second guarantee that a beneficiarymay periodically receive a transfer of an amount of money for the lifeof a designated party, wherein the amount comprises a percentage of theprotected value at the time of a particular event, wherein thepercentage of the protected value is fixed upon an effective date of thesecond guarantee, and wherein the transfer may be due to withdrawal fromthe account or due to benefit payments made to the beneficiary, providedthat the amount may vary based upon withdrawals from the account inexcess of a first particular limit; and wherein at least one of theabove actions is performed using a computer.
 12. The method of claim 11,wherein the beneficiary comprises the designated party.
 13. The methodof claim 11, wherein the initial account balance is equal to the initialdeposit amount.
 14. The method of claim 11, wherein the minimum positivegrowth rate is a fixed rate between four percent and six percent. 15.The method of claim 11, wherein the minimum positive growth rate is avariable rate.
 16. The method of claim 15, wherein the minimum positivegrowth rate is based on a consumer price index.
 17. The method of claim11, wherein the protected value further comprises at least any positivevalue calculated by subtracting the amount based upon the initialaccount balance growing at a minimum positive growth rate from theaccount balance, at the end of the period of time or at the time of theone or more defined events.
 18. The method of claim 11, wherein theinitial deposit is based on an account balance from an existingcontract.
 19. The method of claim 11, wherein the percentage of theprotected value is independent of the designated party's age.
 20. Themethod of claim 11, wherein the percentage of the protected value isindependent of the designated party's age and gender.
 21. A method forproviding a financial instrument, the method comprising: determining aninitial account balance associated with a financial instrument basedupon an initial deposit amount, wherein the financial instrumentcomprises an account with an account balance that changes over time andallows at least part of the account balance to be discretionarilywithdrawn; establishing a first guarantee of a protected value, theprotected value comprising at least an amount based upon the initialaccount balance growing at a minimum positive growth rate for at least adefined period of time or until one or more defined events occur,whichever is sooner; establishing a second guarantee that one or morebeneficiaries may periodically receive a transfer of an amount of moneyfor the life of the longest surviving of a plurality of designatedparties, wherein the amount comprises a percentage of the protectedvalue at the time of a particular event, wherein the percentage of theprotected value is fixed upon an effective date of the second guarantee,and wherein the transfer may be due to withdrawal from the account ordue to benefit payments made to the one or more beneficiaries, providedthat the amount may vary based upon withdrawals from the account inexcess of a first particular limit; and wherein at least one of theabove actions is performed using a computer.
 22. The method of claim 21,wherein the one or more beneficiaries comprise one or more of theplurality of designated parties.
 23. The method of claim 21, wherein theone or more beneficiaries comprise a married couple.
 24. The method ofclaim 21, wherein the minimum positive growth rate is a variable rate.25. The method of claim 24, wherein the minimum positive growth rate isbased on a consumer price index.
 26. The method of claim 21, wherein theprotected value further comprises at least any positive value calculatedby subtracting the amount based upon the initial account balance growingat a minimum positive growth rate from the account balance, at the endof the period of time or at the time of the one or more defined events.27. The method of claim 21, wherein the initial deposit is based on anaccount balance from an existing contract.
 28. The method of claim 21,wherein the percentage of the protected value is independent of thedesignated parties' ages.
 29. The method of claim 21, wherein thepercentage of the protected value is independent of the designatedparties' ages and genders.
 30. A method for providing a financialinstrument, the method comprising: determining an initial accountbalance associated with a financial instrument based upon an initialdeposit amount, wherein the financial instrument comprises an accountwith an account balance that changes over time and allows at least partof the account balance to be discretionarily withdrawn; establishing afirst guarantee of a protected value, the protected value comprising atleast an amount based upon the initial account balance growing at aminimum positive growth rate for a duration, the duration beginning at afirst time and extending at least until a second time, wherein thesecond time is determined by the expiration of a specified period oftime after the first time or by the occurrence of one or more definedevents occur, whichever is sooner; establishing a second guarantee thata beneficiary may periodically receive a transfer of an amount of moneyfor the life of a designated party, wherein the amount comprises apercentage of the protected value at the time of a particular event,wherein the percentage of the protected value is fixed upon an effectivedate of the second guarantee, and wherein the transfer may be due towithdrawal from the account or due to benefit payments made to thebeneficiary, provided that the amount may vary based upon withdrawalsfrom the account in excess of a first particular limit; and wherein atleast one of the above actions is performed using a computer.
 31. Themethod of claim 30, wherein the first time is substantially equivalentto the time at which the initial account balance is determined.
 32. Themethod of claim 30, wherein the first time is substantially equivalentto five years after the time at which the initial account balance isdetermined.
 33. The method of claim 30, wherein the second time issubstantially equivalent to the time at which a first discretionarywithdrawal is made from the account balance.
 34. The method of claim 30,wherein the minimum positive growth rate is a variable rate.
 35. Themethod of claim 34, wherein the minimum positive growth rate is based ona consumer price index.
 36. The method of claim 30, wherein theprotected value further comprises at least any positive value calculatedby subtracting the amount based upon the initial account balance growingat a minimum positive growth rate from the account balance, at thesecond time.
 37. The method of claim 30, wherein the initial deposit isbased on an account balance from an existing contract.
 38. The method ofclaim 30, wherein the percentage of the protected value is independentthe designated party's age.
 39. The method of claim 30, wherein thepercentage of the protected value is independent of the designatedparty's age and gender.
 40. A computer system for providing a financialinstrument, the computer system operable to: receive a request topurchase a financial instrument, the financial instrument comprising: anaccount with an account balance that changes over time, wherein at leastpart of the account balance may be discretionarily withdrawn and whereinthe initial account balance is based upon an initial deposit amount; afirst guarantee of a protected value, the protected value comprising atleast an amount based upon the initial account balance growing at aminimum positive growth rate for at least a defined period of time oruntil one or more defined events occur, whichever is sooner; and asecond guarantee that a beneficiary may periodically receive a transferof an amount of money for the life of a designated party, wherein theamount comprises a percentage of the protected value at the time of aparticular event, wherein the percentage of the protected value is fixedupon an effective date of the second guarantee, and wherein the transfermay be due to withdrawal from the account or due to benefit paymentsmade to the beneficiary, provided that the amount may vary based uponwithdrawals from the account in excess of a first particular limit;process the request to purchase the financial instrument; and transmitan account identifier associated with the financial instrument.
 41. Thecomputer system of claim 40, wherein the initial account balance isequal to the initial deposit amount.
 42. The computer system of claim40, wherein the minimum positive growth rate is a variable rate.
 43. Thecomputer system of claim 42, wherein the minimum positive growth rate isbased on a consumer price index.
 44. The computer system of claim 40,wherein the protected value further comprises at least any positivevalue calculated by subtracting the amount based upon the initialaccount balance growing at a minimum positive growth rate from theaccount balance, at the end of the period of time or at the time of theone or more defined events.
 45. The computer system of claim 40, whereinthe initial deposit is based on an account balance from an existingcontract.
 46. The computer system of claim 40, wherein the percentage ofthe protected value is independent of the designated party's age. 47.The computer system of claim 40, wherein the percentage of the protectedvalue is independent of the designated party's age and gender.
 48. Afinancial instrument comprising: an account with an account balance thatchanges over time, wherein at least part of the account balance may bediscretionarily withdrawn and wherein the initial account balance isbased upon an initial deposit amount; a first guarantee of a protectedvalue, the protected value comprising at least an amount based upon theinitial account balance growing at a minimum positive growth rate for atleast a defined period of time or until one or more defined eventsoccur, whichever is sooner; and a second guarantee that a beneficiarymay periodically receive a transfer of an amount of money for the lifeof a designated party, wherein the amount comprises a percentage of theprotected value at the time of a particular event, wherein thepercentage of the protected value is fixed upon an effective date of thesecond guarantee, and wherein the transfer may be due to withdrawal fromthe account or due to benefit payments made to the beneficiary, providedthat the amount may vary based upon withdrawals from the account inexcess of a first particular limit.
 49. The financial instrument ofclaim 48, wherein the beneficiary comprises the designated party. 50.The financial instrument of claim 48, wherein the minimum positivegrowth rate is a variable rate.
 51. The financial instrument of claim50, wherein the minimum positive growth rate is based on a consumerprice index.
 52. The financial instrument of claim 48, wherein theprotected value further comprises at least any positive value calculatedby subtracting the amount based upon the initial account balance growingat a minimum positive growth rate from the account balance, at the endof the period of time or at the time of the one or more defined events.53. The financial instrument of claim 48, wherein the initial deposit isbased on an account balance from an existing contract.
 54. The financialinstrument of claim 48, wherein the percentage of the protected value isindependent of the designated party's age.
 55. The financial instrumentof claim 48, wherein the percentage of the protected value isindependent of the designated party's age and gender.
 56. A financialinstrument associated with an account having an account balance thatchanges over time, wherein at least part of the account balance may bediscretionarily withdrawn and wherein the initial account balance isbased upon an initial deposit amount, the financial instrumentcomprising: a first guarantee of a protected value, the protected valuecomprising at least an amount based upon the initial account balancegrowing at a minimum positive growth rate for at least a defined periodof time or until one or more defined events occur, whichever is sooner;and a second guarantee that a beneficiary may periodically receive atransfer of an amount of money for the life of a designated party,wherein the amount comprises a percentage of the protected value at thetime of a particular event, wherein the percentage of the protectedvalue is fixed upon an effective date of the second guarantee, andwherein the transfer may be due to withdrawal from the account or due tobenefit payments made to the beneficiary, provided that the amount mayvary based upon withdrawals from the account in excess of a firstparticular limit.
 57. The financial instrument of claim 56, wherein theminimum positive growth rate is a variable rate.
 58. The financialinstrument of claim 57, wherein the minimum positive growth rate isbased on a consumer price index.
 59. The financial instrument of claim56, wherein the protected value further comprises at least any positivevalue calculated by subtracting the amount based upon the initialaccount balance growing at a minimum positive growth rate from theaccount balance, at the end of the period of time or at the time of theone or more defined events.
 60. The financial instrument of claim 56,wherein the initial deposit is based on an account balance from anexisting contract.
 61. The financial instrument of claim 56, wherein thepercentage of the protected value is independent of the designatedparty's age.
 62. The financial instrument of claim 56, wherein thepercentage of the protected value is independent of the designatedparty's age and gender.
 63. A financial instrument associated with anaccount having an account balance that changes over time, wherein atleast part of the account balance may be discretionarily withdrawn andwherein the initial account balance is based upon an initial depositamount, the financial instrument comprising: a first guarantee of aprotected value, the protected value comprising at least an amount basedupon the initial account balance growing at a minimum positive growthrate for at least a defined period of time or until one or more definedevents occur, whichever is sooner; and a second guarantee that one ormore beneficiaries may periodically receive a transfer of an amount ofmoney for the life of the longest surviving of a plurality of designatedparties, wherein the amount comprises a percentage of the protectedvalue at the time of a particular event, wherein the percentage of theprotected value is fixed upon an effective date of the second guarantee,and wherein the transfer may be due to withdrawal from the account ordue to benefit payments made to the one or more beneficiaries, providedthat the amount may vary based upon withdrawals from the account inexcess of a first particular limit.
 64. The financial instrument ofclaim 63, wherein the minimum positive growth rate is a variable rate.65. The financial instrument of claim 64, wherein the minimum positivegrowth rate is based on a consumer price index.
 66. The financialinstrument of claim 63, wherein the protected value further comprises atleast any positive value calculated by subtracting the amount based uponthe initial account balance growing at a minimum positive growth ratefrom the account balance, at the end of the period of time or at thetime of the one or more defined events.
 67. The financial instrument ofclaim 63, wherein the initial deposit is based on an account balancefrom an existing contract.
 68. The financial instrument of claim 63,wherein the percentage of the protected value is independent of thedesignated parties' ages.
 69. The financial instrument of claim 63,wherein the percentage of the protected value is independent of thedesignated parties' ages and genders.